New Shropshire pensioners to be £3k worse off than last year
Shropshire people who retire this year expect to be almost £3,000 worse off than those whose careers ended in 2015, a report has found.
On average, people retiring in the West Midlands expect to receive an annual income of £15,200 – 16 per cent less than last year – according to research from Prudential.
The figures are made up of how much money people think they will have coming in a year from all their pensions, including the state pension, as well as from any savings or investments.
The total income figure is the lowest of any region in the UK, and contrasts with the national picture, as around England people expect £17,700 – £700 more than last year.
People in the South East expect to live on £21,500, 25 per cent more than last year, while London has suffered the biggest fall, with the average pensioner expecting an annual income of £16,800 this year.
Nick Jones, principal of Shopshire-based financial advisers Nick Jones Wealth Planning, said: "At first glance the 16 per cent drop in expected retirement incomes in the West Midlands could be a cause for concern.
"When you see that this income figure includes state pension, personal pensions and income from savings and investments it is actually more of a reflection of the situation faced by many soon-to-be, and existing, retired people across the UK.
"Very few cash-based accounts offer anything near real inflation and those that do usually cap the amount of money that can benefit from better rates. Fixed rate cash bonds that are maturing are offering much lower returns than five years ago too.
"Increased pensions flexibility has removed the need for people to buy annuities – giving them real choice regarding exactly how much they extract and when.
"This should increase confidence that they won't be short, especially in the early retirement years. It will be interesting in 10 years when we start to see people who have exhausted their pension pots, as we've seen in Australia, who introduced similar pensions freedoms 20 years ago."
Prudential found that nationally 56 per cent of people retiring in 2016 felt financially well-prepared for their retirement, up from 54 per cent last year.
